It’s shocking how much the choices we make when we are young can affect the life we lead now.

As a parent, it’s imperative that you do your best to help your child understand these lessons so that he or she can grow up to maximize not only her earning ability, but also her saving ability. Of course, as we all know, children can and will do their own thing, but who knows – maybe some of these life lessons will stick and you’ll be the parent of a millionaire.

Make Savings Your First Task with a New Paycheck

When your child lands her first real job, talk to her about setting up a savings account. Sure, the part-time work in high school may not be conducive to two direct deposit accounts, but most banks have an arrangement where a checking account can be linked to a savings account. When your child opens her savings account, show her how to link it to a savings account and then establish an automatic transfer for those biweekly part-time paychecks.

Later, when your child has her first job with a steady paycheck or salary, remind her how much easier it is to take out your savings before she starts to spend the money she’s earned. Again, set up an automatic transfer – this time you can do the same amount per month, or encourage your older child to look into the possibility of having a percentage of each paycheck directly deposited into a savings account. If your child saves first, and then builds a budget around what’s left – she’ll already have a nest egg growing.

Pay Cash for Just About Everything

Credit may have tightened up, but it will start getting easier again over time, and that will be a trap for your child. Teach your child the importance of delayed gratification and show her how important it is to pay cash for things like cars and other large purchases. It is far better to drive a clunker for a couple of years and save up cash to buy something newer than take out crippling loans and drive something brand new off the lot and wind up paying through the nose for another five years.

Not only are those monthly payments hard to swallow, but they are hard to leave behind as well. Once you buy a new car, it can take years to pay off, and if you don’t then save up for the next one, you child will be committing herself to ongoing payments to a bank forever. Lead by example in your own life and take your child car shopping so that she understands early on just how much money can be saved and how much more freedom you can have by not strapping yourself into debt. The same thing goes for credit cards and other expensive loans.

Start Working Now

The best predictors of future wealth are how much you save and also how much you earn. Those who are struggling in the economy right now understand that not having a job can cripple you now and into the future. Sure, it can be frustrating to wait tables or work in retail, but it is far more frustrating to not be able to get a job at all because you have no work experience.

There are many benefits to having and keeping a job outside of just earning a paycheck. That paycheck will help your child understand the value of her own money, which is huge, but the job will also teach her responsibility, give her connections to future jobs and possibilities and expose her to industries and opportunities.

Outside of that, it is far easier to get a new job when you’re already employed, so working anywhere when you’re young can be the first building block to resourcefulness and future employment as well. Not to mention all of that money she’ll be able to sock away into savings.

Make Your Child Earn It

While we all love to give our children treats, encouraging your child to earn her own money and be in a position of control over funds early on will teach your child more fiscal responsibility that just allowing her to have everything she wants any time she wants it. Make allowances tied to chores, and your young child can even start saving young as well. Simply sock away half of her allowance or “match” her earnings in a savings account for her.

Tie the savings account to a future goal that the two of your set together – perhaps a car when she’s sixteen or a college degree. Then, when she reaches the goal (along with your help), you’ll be getting her started on the right path for future savings goals and rewards.

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